Canada’s biofuels opportunity cannot be built on imports

In a more fragmented and protectionist global economy, relying on imports to meet domestic compliance obligations is not a viable long-term strategy.

Over the past year, the global energy landscape has changed dramatically.

Trade tensions have intensified. Geopolitical instability has deepened. And energy market volatility has become a defining feature of the global economy. The disruption in the Middle East, and instability affecting shipments through the Strait of Hormuz sent shockwaves through global crude markets, reinforcing the hard reality that energy security can no longer be treated as a secondary policy consideration.

It is now central to economic stability, affordability, and national resilience.

Canada has felt these pressures directly. When energy prices spike, the impact is immediate for households, businesses, and governments alike. Affordability concerns quickly move to the forefront, shaping public expectations and political priorities.

That shift is also reshaping the conversation around biofuels.

For years, discussions about biofuels focused primarily on emissions reductions. That objective remains critical. But in today’s environment, low-carbon fuels discussions increasingly begin with affordability and energy security—and then decarbonization.

That is not a retreat from climate ambition. Considering all three aspects is how we make the transition durable.

As demand for biofuels—such as ethanol, bio-based or renewable diesel, and sustainable aviation fuel—continues to grow, Canada faces an important challenge. Despite strong demand signals from the Clean Fuels Regulations, Canada remains heavily reliant on imports—primarily from the United States—to meet a significant portion of its biofuels needs.

That dependency comes with risk.

Policy changes in the U.S., including increasing renewable fuel obligations and potential restrictions on certain feedstocks, are already tightening supply and increasing competition for available product. In a more fragmented and protectionist global economy, relying on imports to meet domestic compliance obligations is not a viable long-term strategy.

Importing compliance is not the same as building energy security.

Canada has all the ingredients needed to become a global leader in low-carbon fuel production. We have abundant natural resources and biomass feedstocks. We have world-class expertise in refining and fuel production. We have strong infrastructure, integrated supply chains, and a highly skilled workforce.

What we need now is the policy environment to match that potential.

The good news is that many of the solutions are practical, targeted, and achievable.

Canada does not necessarily need massive new spending programs to unlock investment in low-carbon fuel production. What industry needs most is predictability: a stable regulatory environment, a competitive investment climate, and a simpler, more efficient compliance system.

Targeted improvements to the Clean Fuels Regulations could help stimulate domestic production while improving affordability and strengthening energy security. Measures such as incentives tied to new Canadian production capacity, greater flexibility within compliance mechanisms, and streamlined regulatory processes would help reduce investment uncertainty and improve competitiveness.

These are not radical changes. But they could have a significant impact.

This is about more than compliance with regulations. It is about building long-term Canadian capacity, reducing reliance on foreign supply, and positioning our country for economic growth in an increasingly competitive global energy market.

Canada is at a strategic crossroads.

We can continue to rely on external supply and accept growing vulnerability to global disruption. Or we can seize this moment to strengthen domestic production, reinforce energy security, and position Canada as a leader in both conventional and low-carbon fuels.

We have the resources. We have the expertise. We have the opportunity.

The question is whether we will act on it.